Gold futures resumed a slump for the week early Thursday as the U.S. dollar rose in the wake of new lockdowns in Europe to combat rising coronavirus cases, while equities worldwide slipped on fears of slowing economic growth.
Gold has moved in line with the dollar’s strength absent other catalysts of late but some longer-term investors believe that a resurgence of the pandemic and the belief that the viral outbreak may lead to further global fiscal stimulus has been considered a boon for bullion.
“Ultimately, gold will benefit as Europe unleashes more stimulus and as investors grow comfortable with a slight pause in aid from Washington DC,” wrote Edward Moya, senior market analyst at Oanda, in a note.
The ICE U.S. Dollar Index DXY traded up around 0.4% in Thursday dealings. A stronger greenback can make dollar-priced gold more expensive to overseas buyers.
France announced a new curfew in Paris and other major cities, as U.K. also introduced restrictions in London. Meanwhile, European leaders are meeting to discuss the coronavirus pandemic as well as trade talks with the U.K. with the Brexit transition period due to end at the end of 2020.
December gold GOLD, +1.25% GCZ20, -0.55% rose fell $11.50, or 0.6%, to trade $1,895.80 an ounce, nearly wiping out all of Wednesday’s 0.7% gain, and highlighting fitful trade for bullion on the week.
Silver for December delivery SI00, -2.44% SIZ20, -2.44%, meanwhile, shed 52 cents, or 2.1%, to $23.88, following a 1.1% gain in the previous session.
On the week so far, gold prices have lost 1.7%, while silver futures are down 5.5%.